Even with the TSX hitting highs amid economic uncertainty, undervalued gems exist in beaten-down sectors. Whether we’re talking about real estate investment trusts (REITs) or undervalued dividend stocks, it doesn’t really matter. There’s value to be found in many corners of the market.
Here are two of my top undervalued dividend stock picks and two REITs that I think can provide investors with excellent long-term returns and are worth buying in 2026.
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Bank of Montreal
Bank of Montreal (TSX: BMO) is among the leading Big Five Canadian banks I’ve long thought provides investors with excellent value for the yield provided.
Indeed, trading at a forward price-to-earnings ratio of just 12.3 times, while also providing a dividend yield of 4.4%, Scotiabank is a leader in providing the sort of value and yield long-term investors are after. It’s also impressive that this top-tier blue-chip Canadian bank can provide such a yield, considering the absolute tear its stock price has been on over the course of the past year. Much of that high-yield component has to do with decades of dividend growth, which has compounded into a strong bond-like proxy worth buying today.
For those bullish on the relatively safe and defensive (thanks to high levels of regulation) Canadian banking sector, BNS stock is a top pick in my view to consider right now.
Suncor
Energy stocks are booming, and Suncor (TSX: SU) is certainly no exception to that rule right now.
Shares of the large-cap Canadian energy producer have been on a tear over the course of the past year, surging around 50% over this time frame alone.
Despite this incredible move, shares of Suncor stock still yield an impressive 3.1%, and this stock trades at a very reasonable multiple of just 16 times trailing earnings. Indeed, I find it hard to locate such remarkable value in the blue-chip equities space, considering how defensive companies like Suncor have performed amid shifting capital flows.
For those who think oil and gas prices can continue to head higher, this is an easy no-brainer pick, in my view.
Granite REIT
One top Canadian REIT I’ve begun to pound the table on of late is Granite REIT (TSX: GRT.UN).
There are good reasons for this. For one, Granite is the kind of boring, mission‑critical industrial landlord long‑term investors can feel comfortable owning through just about any macro backdrop. The trust’s portfolio of modern logistics and warehouse properties is leased primarily to investment‑grade tenants. These tenants are locked into long‑duration, CPI‑linked contracts. That means cash flows tend to grind higher even when the economy wobbles.
In 2025, revenue climbed to more than $618 million while operating income surged to roughly $520 million. To me, that’s proof that Granite’s assets sit at the heart of global supply chains rather than on the speculative fringes. Same‑property net operating income (NOI) growth ran in the mid‑single‑digit range despite sector headwinds. Thus, for those thinking long-term, this is a 4% yielding name worth buying today.
Choice Properties REIT
One REIT I haven’t given as much love to of late, but probably should, is Choice Properties REIT (TSX: CHP.UN).
Indeed, if Granite is your growth‑tilted compounder, Choice Properties is the steady, sleep‑at‑night anchor that can quietly drive total returns while cushioning portfolio volatility.
Roughly 83% of its portfolio is necessity‑based retail, and an estimated 58% of revenue flows from Loblaw, Canada’s largest grocer and pharmacy chain. This provides Choice REIT with a cash‑flow profile that looks more like a regulated utility than a cyclical mall owner.
In recent quarters, occupancy hovered near the high‑90% range, with same‑property NOI growth above 4% and renewal spreads in the high‑single digits. These trends underscore why Choice Properties REIT is one of the top 5%-yielding REITs to consider right now.
